Dealmaker: Bellwether Enterprise Closes $36M for Calif., Utah Commercial Properties

Bellwether Enterprise Real Estate Capital, Cleveland, closed two refinancing loans totaling $35.5 million for a single-tenant office building in El Segundo, Calif. and a retail center in Orem, Utah.

The deals included a $25 million refinance loan for a single-tenant office building in Los Angeles’ South Bay region. The building was constructed in the 1950s and expanded to 200,000 square feet of rentable space in the 1980s. The defense company tenant recently extended its lease for another 10 years.

Bellwether Enterprise Executive Vice President Shelley Magoffin and Vice President Max Sauerman arranged the loan, which refinanced an existing life company loan that carried a high single-digit interest rate and was subject to a prepayment penalty. The new non-recourse 12-year loan included three years of interest only payments followed by a 30-year amortization. The interest rate was locked at application in the low four percent range.

In Utah, Magoffin and Sauerman arranged a $10.5 million refinance loan for a retail shopping center. Constructed in phases between the 1950s and the 1980s, the shopping center totals 100,000 square feet of retail space, currently 95 percent leased to eleven tenants. The new loan returned a portion of the borrower’s equity and provide additional funds for capital expenditures, tenant improvements and leasing commissions.

Magoffin said the center was anchored by a non-credit tenant with just two years left on the lease. Additionally, two tenants representing nearly 20 percent of the net rentable area had not yet completed their build-out and were not yet paying rent when the loan closed. She and Sauerman identified an insurance company correspondent lender comfortable with the tenancy and near term rollover and was able to structure around the roll and the tenants not yet in occupancy.

The new non-recourse 10-year loan included a flexible prepayment premium for the latter half of the loan term.